Strategic Toeholds in Takeovers
While intuitively the toehold, i.e. target shares acquired in the market prior to launching takeover bids, should be maximal, the empirical results reveal heterogeneity in the observed levels. Our study explains this gap. With a tender offer model with asymmetric information, we find that acquiri...
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| Autori principali: | , , |
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| Natura: | Article ou chapitre numérique |
| Lingua: | Français |
| Pubblicazione: |
2026
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| Soggetti: | |
| Accesso online: | Accès Université d'Orléans et IFPM |
| Riassunto: | While intuitively the toehold, i.e. target shares acquired in the market prior to launching takeover bids, should be maximal, the empirical results reveal heterogeneity in the observed levels. Our study explains this gap. With a tender offer model with asymmetric information, we find that acquiring a toehold is optimal. We thus determine the optimal level of the toehold: it is reduced by strong dilution mechanisms, soft financial constraints for the bidder, low financial frictions, and a high level of legal protection for investors. We provide empirical evidence that supports our predictions.
JEL Codes: D82, O12, Q15
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